HKEX Consultation Paper on Proposed Changes to Trading Hours

Hong Kong Exchanges and Clearing Limited (HKEX):

Subject: Extension of Trading Hours

HKEX is currently engaging the public in a consultation process to discuss potential changes to trading hours. The Hong Kong Securities and Futures Professionals Association, a key stakeholder in the industry, closely monitors the evolution of the Hong Kong securities market and addresses industry demands. As the largest association in the sector, we are deeply invested in this issue. In September 2010, we conducted a survey among our members to collect their perspectives on extending trading hours, ensuring their views were communicated to the relevant authorities.

Approximately 1,200 questionnaires were distributed, with 778 responses received. The survey was structured into three sections: the first section sought to understand members' general opinions on HKEX's proposed changes to trading hours; the second section explored preferences for specific timings, including market opening, lunch breaks, and closing times; and the final section captured individual opinions regarding the adjustment of trading hours. For further details, please refer to the attached document.

1. What is your reaction to the proposal by the stock exchange to modify trading hours?
   - In favor: 87 (11%)
   - Opposed: 599 (77%)
   - No opinion: 92 (12%)
   - Total: 778

2. If the stock exchange advances the market opening time, by how much do you think it should be advanced?
   - Oppose advancing: 481 (62%)
   - Advance by 10 minutes: 30 (4%)
   - Advance by 20 minutes: 45 (6%)
   - Advance by 30 minutes: 175 (22%)
   - Other and no opinion: 47 (6%)
   - Total: 778

3. If the stock exchange shortens the current lunch break (currently two hours), how much time do you think is minimally needed for lunch?
   - Maintain current time: 496 (64%)
   - At least 1 hour and 30 minutes: 227 (29%)
   - At least 1 hour: 14 (2%)
   - At least 30 minutes: 9 (1%)
   - Cancel lunch time: 6 (1%)
   - Other and no opinion: 26 (3%)
   - Total: 778

4. If the stock exchange delays the market closing time, by how much do you think it should be delayed?
   - Oppose delaying: 573 (73%)
   - Delay by 10 minutes: 48 (6%)
   - Delay by 20 minutes: 20 (3%)
   - Delay by 30 minutes: 93 (12%)
   - Other and no opinion: 44 (6%)
   - Total: 778

5. Do you think modifying trading hours helps you in the stock market?
   - Helpful: 74 (10%)
   - Not helpful: 677 (87%)
   - No opinion: 27 (3%)
   - Total: 778

6. Do you think modifying trading hours increases your or your clients' investment appetite?
   - Increases: 45 (6%)
   - No increase: 614 (79%)
   - No opinion: 119 (15%)
   - Total: 778

7. Do you think modifying trading hours affects your life?
   - Affects: 603 (77%)
   - No effect: 138 (18%)
   - No opinion: 37 (5%)
   - Total: 778

I am a:
   - Stock trader: 480 (62%)
   - Stock settlement staff: 45 (6%)
   - Market participant: 97 (12%)
   - Investor: 116 (15%)
   - Other: 40 (5%)

Summary

Part One: A significant majority, 77%, of respondents are against altering the existing trading hours, while only 11% express support for such changes.

Part Two: When it comes to the proposal of moving the market opening time earlier, 62% oppose this adjustment. Conversely, 22% favor an advancement of 30 minutes, with other proposed options receiving less than 6% support. Regarding the midday break, 64% are against changing its duration, while 29% believe that, if a change is made, it should last a minimum of 1 hour and 30 minutes; alternative suggestions garnered less than 2%. In terms of delaying the market closing time, 73% oppose this change, with 12% supporting a delay of 30 minutes, 6% opting for a 10-minute delay, and 3% preferring a 20-minute extension.

Part Three: Only 10% of members believe that modifying trading hours would benefit the stock market, while 87% disagree. A mere 6% think that such changes would enhance investment appetite, with 79% holding the opposite view. Additionally, 77% feel that changes to trading hours would impact their lives, while 18% do not share this concern.

In light of these survey findings, our association stands firmly against any modifications to the current trading hours. We assert that extending these hours does not necessarily lead to increased trading volumes, but rather adds to the workload of frontline employees. Should HKEX persist with plans to alter trading hours, the Hong Kong Securities and Futures Professionals Association requests that the market opening time be moved forward by no more than 30 minutes, the midday break be set at a minimum of 1 hour and 30 minutes, and the closing time be postponed by no more than 30 minutes.